CONDUCT CODE FOR FINANCIAL PLANNERS? MAYBE NOT

FINANCIAL PLANNERS ARE battling one another over a proposed conduct code, which opponents say will only provide ammo for client lawsuits. An existing ethics statement forbids the nation's 32,000 Certified Financial Planners from cheating their clients. The CFP board, which certifies planners, is looking at going beyond that to a list of things every CFP must do, such as assessing clients' investment goals and gauging their risk tolerance.

Backers of the code, called the Practice Standards, figure that it would be a good way to build public confidence in CFPs. Says Kevin Condon, chairman of the Maryland CFP society: ``We must pay this price to get the charlatan with the yellow pad out.'' Last year, only 36 planners got stripped of their certifications, usually after client complaints.

A tougher code also could stave off government regulation, which several congressional bills threaten to impose. The threat hasn't yet galvanized the CFP board to action. It's too caught up in the internal wrangling over the issue. The code's foes are more afraid of lawyers than regulators. Gib Kerr, head of the Los Angeles CFP organization, gripes that legal sharpies will twist some part of the code to let disgruntled clients sue planners. He says 18 of the 72 CFP societies nationally are on record opposing the code.

EDITED BY LARRY LIGHT
By Roy Furchgott

Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.Terms of Use